Money Talks Weekly
This is my weekly learnings to our email subscribers, same will be shared in our website and linked in. Please do share if you think it would benefit to your dear ones.
I was talking to a friend of mine. He has created good wealth in property. He used to loan and buy assets. He used to earn rent, add some money from his pocket and service EMI. Once EMI is completed he is owned that property. That was his usual practice. During covid time, things didn’t go well. Rent didn’t collected as per expectation, tenure left the building. He got into trouble of paying EMI from his pocket.
He is a professional, he earn pretty good money monthly. This loan EMI burden has created a mess in this family and money life. There was a lot of problem related to this excessive EMI payment. They have sold all Gold and small savings with them and closed EMI. Now he is debt free, still not able to rent out the property.
He is making 4 Lakhs per month, his monthly expense is 2.5 Lakhs. He should have 1.5 Lakhs in savings, but not sure where is it going ? He don’t have any liquid savings, he got assets. He is not leading a happy money life, this leads to small family fights (not a serious one)
Can we relate this issue? This is happening with many of us. We think our expense is something, but we end up spending more. If you are in business / self-employed, we may be making less than we actually think, we are making. This is a real problem to address.
We have to keep a proper accounting of income and expenses. In self-employment, income may not be consistent but we should ensure are we really making targeted income year on basis ? else, we have to keep a check in place.
Same time are we spending as per the budget ? or are we over shooting ? are we mixing personal and business expense ?
If you address above 3 questions, we will able to figure out, why are missing our savings targets ?
This has to be address it, right now.
This our own Bermuda triangle ! If you address this, your rich life will start here !